MANILA — As the Philippines-hosted World Economic Forum (WEF) opened May 21 in Manila, research group IBON says that claims that the country could lead the region’s economic growth is pure hype. The country is only being built up as the next destination for investors despite its shallow and unsustainable growth.
Amid the slow recovery in many developed countries, foreign corporations are looking at potential markets where they could direct their excess capital in speculative areas and take advantage of opportunities to profit. International credit agencies, foreign transnational firms and local big business groups support the Aquino administration and its neoliberal economic direction, and this explains the positive assessments, credit rating upgrades, and favorable tags to the country. In fact, labels such as “Asia’s next miracle” and “Asia’s rising star” are all empty advertisements meant to make the Philippines popular to investors.
According to the group, the recent growth in the Philippine economy is artificial, narrow, debt-driven and unsustainable. It is accompanied by worsening job generation, growing unemployment and exclusionary growth mainly in the narrow real estate and construction sectors. These sectors are supported by record low interest rates, which have made financing for production and for consumption artificially cheap. While it artificially increases economic activity, this situation of cheap financing is only momentary.
According to IBON, while the Philippines is being hyped as the next investor destination, it is useful to consider that the so-called BRICS (Brazil, Russia, India, China and South Africa) were promoted in the same way before their unsound fundamentals reasserted themselves and started to limit the opportunities for foreign capital to profit.
The WEF is meant to be a venue to invite foreign transnational corporations and big domestic corporations to look for profitable short-term opportunities amid sluggish US, European and Japanese economies. It will also likely support the looming ASEAN economic integration in 2015, which will make Southeast Asia more conveniently integrated for the global value chains of big foreign transnational corporations. The onset of the ASEAN Economic Community also threatens a rush of imports especially agricultural products and consumer goods including low-tech manufactured products that will compete with local production and further undermine domestic livelihood. The beneficiaries will be mainly US, Japanese and European capital and their junior partners in ASEAN, but will spell more exclusionary growth for countries like the Philippines.
IBON co-sponsored an alternative forum for grassroots organizations to discuss the WEF and its impact on various sectors on May 23, last day of the WEF, at the UCCP Shalom Center in Manila. The participants later marched to Taft Avenue to dramatize their protest against the costly meeting happening in Manila of executives who, they said, were only discussing how to make more profits at the expense of the region’s working people.
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.